Public health exemptions from world trade agreements negotiated five years ago have had no significant impact on improving access to medicines in developing countries, Oxfam said today in a report Patents versus Patients.
Oxfam argues that since 2001, no country has been able to take full advantage of the public health safeguards built into international agreements on patents. The Doha agreement in November 2001 reaffirmed that intellectual property rules contained in the TRIPS agreement should not prevent countries from protecting public health, and in August 2003 the World Trade Organization agreed that generic manufacturers could export essential medicines if compulsory or voluntary licenses were issued by countries without the capacity to make the drugs themselves.
But since then, says Oxfam, the US government has pursued trade agreements with countries and regions that undermine the public health flexibilities, and sought even higher levels of intellectual property protection than required in the TRIPS agreements – so-called TRIPS Plus provisions.
These requirements include prohibiting generic manufacturers from using data generated by innovator companies in their licensing applications for five years after the earliest marketing approval – even though that data may be publicly available on the internet and in medical journals.
It also includes inserting protections for new formulations of existing products into the patent laws of countries that don’t currently recognise slight changes in drug formulation to be significant new innovations worthy of patent protection.
The World Bank recently highlighted the cost of such TRIPS Plus protections to one country currently negotiating a free trade agreement with the US. Thailand would no longer be able to manufacture its own versions of some second-line antiretrovirals, said the World Bank, requiring the Thai government to spend an extra $3.2 billion over the next 20 years on antiretrovirals.
"If implemented, these deals will result in Colombia having to pay an additional £494 million per year by 2020 to cover the increased cost of medicines, affecting nearly six million patients," said Oxfam’s Make Trade Fair campaign head Celine Charveriat.
The US also attempts to use trade sanctions against countries which make generic drugs, says Oxfam. In 2006 the US placed India on the Special 301 Priority Watch List for failing to insert a data exclusivity clause into its patent law (the watch list is the last step before trade sanctions are imposed). A data exclusivity clause in Indian patent law would delay the development of generic versions of any new antiretroviral for five years if the patent holder filed a patent application in India within one year of the first marketing approval of the product anywhere in the world. This means that generic versions of new second-line drugs would now take at least five years to appear in India after they are approved in the US.
Last month two US politicians who will be powerful committee chairmen in the new Democrat-controlled congress requested an investigation of the effects of US trade policy on public health from the Government Accountability Office. Senator Edward Kennedy and Rep. Henry Waxman called for the US to drop pressure on WHO to bury a report on trade and health critical of US policies.
Rep. Waxman said: “Administration trade agreements have numerous provisions that threaten access to affordable medicine. We have to recognise that the Bush administration’s single-minded pursuit of intellectual property protections for drug companies can have potentially devastating consequences for the public health in developing countries.”
Oxfam charges that other rich countries have largely stood by and done nothing while the US has pursued its self-interest through free trade agreements. Although the UK and French governments have spoken out in support of the public health flexibilities granted in the TRIPS agreement, Oxfam charges that European pharmaceutical companies benefit from US policies just as much as their American competitors.
A particular feature of the Cancun trade agreement in 2003 was the concession that countries without manufacturing capacity could import generic drugs under a compulsory license. However, no country has yet used the provision, according to a report of the World Trade Organisation’s own TRIPS Council. This is despite the fact that Canada implemented legislation allowing Canadian manufacturers to make generic antiretrovirals for export.
Richard Elliot of Canada’s HIV/AIDS Legal Network explains why the Canadian legislation hasn’t worked: “The WTO decision embodied in Canada’s law ignores the realities of generic drug manufacturers and developing countries. Developing countries need simple contract processes that will ensure sustainable supplies of essential medicines; these contracts must be flexible enough to adjust to changing needs. The WTO decision enacted by Canada forces generic companies to get a license to manufacture each and every patented drug, and only in a pre-negotiated quantity and to a single country.”
Recently adopted European Union legislation contains a similar requirement for each and every import to be subject to a separate compulsory license.
Medecins sans Frontieres says it has been trying to use the Canadian legislation to buy antiretrovirals for its developing country treatment programmes for two years without success. However it says that the 2003 Cancun decision is inherently unworkable, and points to the following flaws:
- Generic manufacturers are required to negotiate with the patent holder; voluntary license agreements are often lengthy, and it’s unclear when generic manufacturers can say that talks have failed and move ahead regardless, adopting a compulsory license.
- Anti-diversion measures to prevent leakage of generics back into rich markets require the products to look different and be packaged differently from any similar products available in rich countries, and information about the quantities of each batch and its destination must be posted on the internet. MSF says this provision is too onerous, although in practice generic products always look different from the branded products sold in rich countries.
- Countries that want to import drugs under this provision have to inform the WTO TRIPS Council of the drugs and the quantities they want to import, and prove that they don’t have the domestic capacity to make the drugs. MSF says that providing this information could expose importing countries to pressure from opponents of compulsory licensing.
- The Cancun agreement requires countries to seek compulsory licenses for every batch of medicines ordered, and to go through negotiations with the patent holder for every order. This is not feasible, says MSF, and has discouraged manufacturers in Europe and Canada from getting involved in production of generic antiretrovirals. The volume of licensing work that a generic manufacturer has to take on in order to get into this line of business is a huge disincentive, they point out.
But James Love of the Consumer Project on Technology points to one country that has devised a fairly succesful process for exporting medicines under the 2003 Cancun agreement – India.
But, he notes, India is able to export most medicines because they are not yet patented, and the real test will only come when patent applications for newer products have been processed. India is currently in a transitional phase from a patent regime which explicitly blocked patent protection for medicines towards one which is TRIPS-compliant. From 2005 the country was required to accept the patenting of medicines, and some Indian manufacturers are nervous that tightening of the country’s patent regime will eventually remove the ability to make newer antiretroviral products.
But national laws still often fail to fully exploit the flexibilities of the TRIPS Agreement, says James Love. Little or no assistance to exploit the TRIPS flexibilities is coming from the World Health Organization, and the agency is woefully under-resourced to help developing countries improve access to the essential medicines that are contained on WHO’s Essential Medicines list.
He proposes that national governments, health advocates and the UN system now need to look at another approach: patent pools for developing countries which identify all the patents on essential medicines necessary for treating particular diseases, and take the burden of voluntary licensing away from manufacturers by seeking standard terms for voluntary licenses across the developing world. The pool would also create a smoother system for drawing down generic drugs from manufacturers, advocates claim, although the means for achieving this remain to be specified (follow this link for a description of the proposed scope of a patent pool).
Oxfam argues that a review of the effects of TRIPS on essential medicines is urgently needed, and that G8 countries should give support to poor countries that want to enact the TRIPS safeguards. It also calls on the US to stop `coercing` developing countries through free trade agreements.
Pharmaceutical companies argue that a systematic policy of voluntary licensing is being pursued by virtually all antiretroviral manufacturers apart from Abbott (manufacturer of Kaletra) in developing countries, but critics say that the benefits of this approach in price reduction are not reaching middle-income countries, which pharmaceutical companies argue are still capable of paying higher prices for medicines.